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How supply chain issues are affecting functional foods

A recent report from research consultancy on the functional foods ingredients market reflects on the impact of trade barriers to raw materials and disruption to imports.

“The non-availability and high cost of raw materials and high production costs are likely to create challenges for the growth of the global functional food ingredients market,” warns the report which focuses on the market for probiotics, prebiotics, proteins and amino acids, phytochemicals and plant extracts, omega-3 fatty acids and carotenoids.

With many vitamins sourced from China and Covid-19 disruption, there has been negative impact on transport channels, heightening the world to the sensitivity of the supply chain.

Although manufacturers are seeking alternative ingredients, this creates opportunities for local vendors and regional raw material suppliers.

“The development and commerce aspects of functional food ingredients are complex, expensive, and uncertain,” the report says. “Factors behind the success of product development are technological conditions, consumer demand, and legislative/ regulatory background.

“Substantial investment is required for the R&D of a strain to be used for the production of new functional ingredients such as probiotics. Probiotic strains and products are developed and produced in accordance with international food regulations.

“As a result of the high cost of production, the price of the final product is also high. Marketing and distribution further add to the product price. Although consumers are aware of the health benefits derived from these expensive functional food ingredients, their high prices restrict consumers from buying the product.”

However, plant-sourced ingredients are projected to be the fastest-growing segment in the natural source segment from 2021 to 2026.

Prebiotics, proteins, omega-3 fatty acids, minerals, fibres, phytochemicals and plant extracts are the major types of functional food ingredients derived from plant sources. Plant-based proteins are a major source of protein for vegetarians and vegans. Their high nutritional profile, low carbon footprint, and low price are driving their consumption.

Soy, corn, pulses, millet, sorghum, sunflower seeds, wheat, groundnuts, barley and beans are some of the major plant-based sources that are rich in amino acid content, says the report.

“The growing inclination of consumers toward natural and plant-based products has been fuelling the demand for plant-based food amino acids over the last few years.”

Meanwhile, the energy drinks segment is projected to grow at the highest CAGR during the forecast period with functional food ingredients such as vitamins, minerals, and proteins used.

“Many energy drinks have been developed by companies to provide specific medical or health benefits, such as promoting heart health, improving immunity, and helping to boost energy,” it says.

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